021-NLR-NLR-V-20-FONSEKA-v.-CORNELIS.pdf
(97)
[Full Bench]
Present: Wood Benton C.J. and Shaw and De Sampayo JJ.FONSBKA v. COBNELIS313—D. C. Kalutara, 6,923. *' Land Registration Ordinance, No. 14 of 1891, ss. 16 and 17—Probate—Is it an " instrument " within the meaning of s.17 ?—Widow
appointed sole devisee and executrix under her husband’s toiU—Probate not registered—Sale of land in execution for a privatedebt ofwidow—Registrationof Fiscal'sconveyance—Subsequent
sale in execution by a creditor of the testator—Fiscal's conveyancenot registered—Fiscal's sale pending a Paulian action againstexecutrix and another by creditor of the testator—Is sale subject tothe result of the Paulian action?—Sale by or against an executor—Is there a presumption that he is acting in his representative
Solomon died in February, 1902, leaving a last will, by whichbe appointedhis wifeFrancinabis soledeviseeandexecutrix.
Francina took out probate in 1902, but the probate was neverregistered. In October, 1902, Francina sold the land in question,which formed part of Solomon’s estate, to her brother Marthenis.In 1903 Pedro, who had obtained judgment against the executrix for adebt of thetestator, seizedthelandin execution, whenMarthenis
claimed the same. This claim having been upheld, Pedro broughta Paulianaction againstFrancinaand Marthenis tohave it
declared that the transfer to Marthenis was fraudulent, and thatthe land wasavailablefor saleunder hiswrit.Pedroobtained
judgment inJune, 1904,and boughtthe land himself atthe
Fiscal’s saleheld under hiswrit,andobtained a Fiscal’s transfer in
October, 1905. While the Paulian action was pending, Letchimansued Francina and Marthenis for a personal debt of theirs andobtained judgment, and soldthelandon his writ in April,1904, and
purchased it himself, and registered the Fiscal's transfer in August,1904, and subsequently sold the land to the defendant.
Held [per Full Bench], that a probate of a last will is an** instrument ”within themeaningof section17 ofthe Registration
Ordinance, 1391, andthe non-registrationunder section 16 ofthe
probateof a willaffecting immovablepropertyrenders it ?void
as against a person claiming an adverse interest under a dutyregistered deed of subsequent date.
Held,further [perWood Renton C.J.and DeSampayo J.],that
thoughlietchiman (defendant’s predecessorin title)was entitledto
a half' Bhare(Francina’sshare asintestate heir) byreasonof prior
registration of his Fiscal’s conveyance as against Pedro (plaintiff’s
1917.
( 98 )
predecessor in title), yet, as Letchiman bought the land pendingthe Paulian action, the sale was subject to the result of it, and,consequently* the Bale under Pedro*s writ* though subsequent in date,prevailed over the sale under Letchiman's writ.
*' The effect of the decision on the point referred to the FullBench, so far as this case is concerned, is that where property of theestate is disposed of * by a devisee, who is also an heir of the deceased,or is sold against bi« in execution upon an instrument which isregistered prior to the probate of the will, the transferee obtains, inrespect of any share or interest to which the devisee would have beenentitled by law but for the will, a superior title to that of theexecutor or a party claiming under him. ”
“ I think that this matter requires the attention of the Legislature,and in the meantime I would impress on all District Courts andpractitioners the importance of seeing that the probate and letters areduly registered. ”
rriHE facts are set out in the judgment of Wood Benton C.J.,as follows: —
The point of law reserved in this case for consideration by a benchof three Judges is whether the non-registration under sectiou 16 ofthe Land Registration Ordinance, 1891,1 of the probate of a willaffecting immovable property, will render it void as against a personclaiming an adverse interest under a duly registered deed ofsubsequent date. The material facts are these. Francisco Fonsekaand his wife Apollonia, who were married in community of property,were the owners of the land in suit.. On June 20, 1894, by deedNo. 12,489, they gifted the property, subject to the reservation of alife interest in their own favour, to Solomon Fonseka, who died onFebruary 7, 1902,. leaving a last will, by which he appointed hiswife- Francina his sole devisee and executrix. Francina proved thewill, but the probate was never registered. In execution of ajudgment in D. C. Kalutara, No. 2,620, against Francina Fonsekaas executrix of her husband's estate, the property was seized andthe seizure was registered on February 23, 1903. Her brother,Marthenis Fernando, claimed it on a deed from Francina, and onMarch 17, 1903, his claim was upheld. In case D. C. Kalutara,No 2,722, that deed was, on July 12, 1903, set aside as having beenexecuted in fraud of creditors, and on June 22, 1904, the decisionof the District Court was affirmed in appeal. The land was againseized by the Fiscal and sold to Clarence Pedro Fonseka, whoobtained a Fiscal’s transfer (No. 58,261) on October 25, 1905, anddied in September, 1913, leaving the plaintiff as the sole deviseeunder, and executrix of, his will. In the meanwhile, however,Letchiman Chetty had, in D. C. Colombo, No. 18,816, suedFrancina and her brother Marthenis on a promissory note. The• action was instituted on August 18, 1903. Decree was entered
1917.
Fonseka v.Chmelia
1 No. 14 of 1891.
( 99 )
up in. the plaintiff’s favour on September 9, 1903. The landhere in dispute was seized and sold in execution, purchased byLetehiman Chetty himself on Fiscal’s – transfer No. 5,610 datedJuly 18, 1904, and sold in turn by him, by deed No. 45 datedFebruary 3, 1916, to the defendant. The case went to trial onthe following issues:—
Was the judgment in D. C. Colombo, 18,816, against
Francina Fonseka personally ?
Did Letehiman Chetty get good title as against a purchaser
in execution against the estate of Solomon Fonseka, evenif the daim in the said case No. 18,816 was for moneyborrowed to meet testamentary expenses ?
If so, was the said claim for money borrowed to meet
testamentary expenses ?
Did Francina sell the property to one Marthenis Fonseka ?
If so, did any title pass to the defendant ?
Was the sale to Marthenis Fonseka set aside as having been
executed in fraud of the creditors of Solomon Fonseka’6estate ? '
Has defendant been in wrongful possession of a portion of
the said premises as averred in the plaint ?
What damages is the plaintiff entitled to ?
What damages is the defendant entitled to ? (As damages
between the same parties are provided on the same basis,it was agreed that whoever succeeds should get damageson that basis.)
The probate of the last will of Solomon Fonseka not being
registered and the Fiscal’s transfer in favour of thedefendant’s predecessor being duly registered, is thedefendant’s title superior to' that of the plaintiff ?
Even if the debt incurred by Francina Fonseka on the
note sued in D. C. Colombo, 18,816, was not in respectof testamentary expenses, is the defendant’s title superior,if the sale against her in the said case was in her capacityas executrix and sole legatee ?
The learned District Judge answered the 1st, 4th, 6th, and 7thissues in the affirmative, and the 2nd, 3rd, 5th, 9th, 10th, and 11thin the negative, and gave judgment for the plaintiff as prayed-for,with costs.
The probate of Solomon Fonseka’s will was. anterior in date to;the Fiscal’s transfer in favour of Letehiman Chetty, but was neverregistered. The Fiscal’s transfer was registered on August 4, 1904.If, in that state of the facts, it acquired priority over the probate,the defendant would be entitled to half of the property in' suit.
1917.
Fonseka*.Cornelis
( 100 )
1W7.
Fonseka v.
Oort vli*
This point was raised in the 10th issue. The learned DistrictJudge has answered it in the plaintiff's favour, but without givingin detail his reasons for doing so.
The defendant appealed.
A. St. V. Jayawardene (with him H. J. C. Pereira), for the appel-lant.—As regards the half the widow was entitled to by right ofinheritance, the registration of the Fiscal's conveyance in favourof Letchiman Chetty gave the defendant a title superior to that ofthe plaintiff. The Registration Ordinance, 1891, section 16, requiresthat probates and letters of administration should be registered-In section 17, dealing with priority, probates and letters ofadministration are not expressly referred to : they are included inthe term “ other instrument ” or in the term “ judgment or order.”See section 18 and sub-sections (3) and (4) and the schedule III. tothe Ordinance, which provides for the stamp duty on registration;see also section 22. These sections read together clearly show thatthe words “ other instrument ” in section 17 must include probateand letters of administration. Fonseka v. Fernando 1 has been rightlydecided. The same principle obtains in the English Registry Acts.Chadwick v. Turner.2 The probate not being registered is void asagainst the defendant's deed, which was duly registered, and thedefendant is entitled to the half share which devolved on thewidow ab intestato, according to the principle laid down in Jameset al. v. Carolis ct alA
Bawat K.C. (with him Samarawickreme and Cooray), for the respon-dent.—In the West Riding Acts there was provision for the registra-tion of wills, and an express enactment that a will if not registeredwithin a certain time shall be void as against a conveyance froman heir at law. The English decision, therefore, does not apply.Probates have not been so far registered in Ceylon. The words" other instrument ” do not include a probate of a will. Section26 of the Ordinance is against the appellant’s contention. Thedecision in Fonseka v. Fernando1 is wrong, and ought to be re-considered. If the appellant's contention is upheld, it would openthe door to fraud and injustice.
A. St. V. Jayawardene, in reply.—The terms of section 26, whichspeaks of a “ registered owner, " show that it has reference to land'sthe title to which had been registered, for which provision was madein the first Registration Ordinance (No. 8 of 1863). It has noreference to the registration of deeds. It is out of place in thepresent Ordinance, and should be ignored. It is necessary to insiston the registration of probate if the register is to show a completehistory of titles to land.
Cur. adv. vult.
1 (1912) 15 N. L. R. 491.8 (1865) 1 Ch. App. 310.
*(1914) 17 N. L. R. 76.
( 101 )
November 3, 1917. Wood Renton O.J.—
TTin Lordship set out the facts, and continued: —
The relevant provisions of the Land Registration Ordinance,1891,1 on the question are not happily drafted. But the point wasdecided in a sense .contrary to the view of the learned DistrictJudge by Lascelles O.J. and myself in Fonseka v. Fernando,2 andthat decision has been indirectly recognized by later authorities.®After full re-consideration of the whole matter, I venture to thinkthat Fonseka v. Fernando2 was rightly decided. Little help is, in myopinion, to be obtained either from the fact that the Land Registra-tion Ordinance, 1907,4 which has not yet been proclaimed, expressly- includes the “ probate of a will ** in its definition of “ deed, ”5 andconfers6 upon probates priority by registration, or from Englishdecisions7 under the Middlesex Registry Act, 1708,® and similarlegislation.
The question has to be decided under the provisions of the localOrdinance.1 Now, it is true that section 15, in providing for the* preparation of books for the purposes of the Ordinance, refers onlyto deeds. But section 16 enacts that “ the probate of any will Maffecting lands “ shall be registered ”. The requirement is as per-emptory in the case of probates as in that of deeds of sale. Section17 then provides that “ every deed, judgment, order, or otherinstrument as aforesaid, unless so registered, shall be deemed voidas against all parties claiming an adverse interest thereto on valuableconsideration, by virtue of any subsequent deed, judgment, order,or other instrument which shall have been duly registered as afore-said It is argued on behalf of the plaintiff that the Legislaturehad advisedly omitted any mention of probates in this clause, andthat the words “ other instrument as aforesaid ” show that whatwas being dealt with was the class of instruments indicated in theopening clause of section 16, viz., “ every deed or other instrumentof sale, ” Ac. I cannot agree. If that had been the intention of• the Legislature, I should have expected the words “ other instru-ment ” to follow the term “ deed ” in section 17, as they do in section16. The expression “ instrument ” does not ordinarily includejudgments or orders.9 I think that what was intended by itsuse and juxtaposition in section 17 was to catch up and include ina compendious phrase everything in section 16 that the followingsection was not expressly mentioning. The words “ as aforesaid ”in section 17 are not limited to “ other instrument. * * They governequally “ deed, ” " judgment, ” and “ order. ” That this is thecorrect interpretation of section 17 is, I think, shown by the fact
1 No. 14 of 1891.• Section 86.'
* (1912) IS N. L. R. 491.7 See. e.g., Chadwick v. Turner,
® Marikar v. Marikar, (1916) 2 C. W.(1886) L. R. 1 Ch. 310.
R. 79.8 7 Ann. C. 20.
No. 3 of 1907.' 9 Stroud'8 Judicial Dictionary, s. v.
Section 3.“ Instrument ”.
1917.
Fonseka V.Oomelis
( 102 )
1017.
Wood
Renton C.J.
Fanseka v.Oomelis
that probates are included in the third schedule to the Ordinanceas liable to stamp duty, and that the only authority for the imposi-tion of such duty is to be found in section 18 (3) and (4), whichare in these terms: —
“ (S) No deed, judgment, order, or other instrument shall beregistered unless the same has been stamped with a stampdenoting that the duty payable thereon has been duly paidas hereinafter provided.
“ (4) The duty payable for the registration of the severalinstruments mentioned and described in the third schedule• hereunto annexed shall be the amount set down in figuresagainst the same respectively, together with the additionalduty, if any, payable under section 20. ”
It was argued for the plaintiff that sections 22 and 26 told againstthe construction which I am here putting on section 17. Section 22provides that’ “ when a party applies to have a probate or lettersof administration registered,- he shall produce to the Registrar an.authenticated copy of the inventory or list of appraisement filedin the case in which application for probate or administration wasmade, and shall further give such description of the land as theRegistrar shall require for the purposes of registration.” But thisprovision is clearly supplemental to the general requirements ofsection 18 (1), (2), as to the form and substance of applications forregistration. It could never have been the intention of the Legis-lature that an executor, on applying for registration of probate, shouldmerely produce an authenticated copy of the inventory, and thatthen the Registrar, after reference to the lists of executors forwardedto him from the District Courts in compliance with section 28 of theOrdinance, should allow probate to issue. Section 26 is as follows: —
" On the death of any registered owner or other interestedparty, all lands belonging to him, or in which he may havean interest, shall remain in his name until probate oradministration of his estate shall have been granted,whereupon, and upon a written application in that behalf,the name of the executor or administrator shall be registeredin the books until a partition, transfer, or alienation ofthe lands shall have been effected, whereupon, and uponlike application, such partition, transfer, or alienationshall be registered as hereinbefore provided. ”
This enactment is borrowed from the repealed Ordinance No. 8 of1863, which provided for registration of titles, and seems out ofplace in an enactment confined to the registration of deeds. I donot think that we should be justified, on the strength of anythingin section 26, in holding that the registration of a probate undersection 16 of the Ordinance of 1891 was intended to supply a linkin the history of the title to the land which it affects.
I would answer the question submitted to us in the affirmative.
( 103 )
Shaw J.—
The only question raised lor determination by a bench of threeJudges is whether, in consequence of the provisions of the LandRegistration Ordinance, 1891, the title obtained under a subsequentsale of land that has been duly registered under the provisions of theOrdinance takes precedence to a title derived under a prior probatethat has not been registered.
The point has already been decided in the affirmative by a benchof two Judges in the case of Fonseka v. Fernando,1 followed inMarikar et al. v. Marikar et al.,2 and, in my opinion, the decisionin those cases was correct.
The Ordinance, by section 16, provides that all deeds and otherinstruments of sale, purchase, &c., affecting land, and deeds affectingsuch deeds, and other instruments, probates, and grants of adminis-tration affecting land, and judgments and orders of Court affectingland, shall be registered in the branch office of the district in whichsuch land is situate. Section 17 then provides that every deed,. judgment, order, or other instrument as aforesaid, unless soregistered, shall be deemed void as against all parties claiming anadverse interest thereto on valuable consideration by virtue ofany subsequent deed, judgment, order, or other instrument whichshall have been duly registered as aforesaid.
The question that arises is whether a probate is an " other instru-ment as aforesaid ° within the meaning of this section. The objectof the legislation is to ensure that, for the protection of bona fidepurchasers, all incumbrances, &c.f affecting land shall be registeredin the proper place so that they may be discovered on search beingmade, and the provision that probates shall be registered would beuseless if it were intended that failure to register them should haveno effect, and should give no priority to subsequent duly registeredinstruments. The words “other instruments as aforesaid0 insection 17, in my opinion, refer to all instruments mentioned in theprevious section, and not to those only as are mentioned in the firstparagraph of that section.
A probate is an “ instrument,0 the form of which is provided inthe schedule of the Civil Procedure Code, unlike judgments andorders, which are, therefore, specially mentioned in section 17, andthat this is so seems to me to be clear from the fact that schedule HI.of the Land Registration Ordinance provides for a stamp duty ofRs. 5 in respect of a probate under section 18 of the Ordinance,which by sub-section (3) provides that “ no deed, judgment, order,or other instrument ° shall be registered unless stamped as provided.In this section probates are not specifically mentioned, and the dutyof Rs. 5 would not be authorized by the section unless they comeunder the words “ other instrument. °
1917.
Fonseka v.OomeUs
1 (1912) 16 N. L. R. 491.
8 (1916) 2 C. W. R. 79.
( 104 )
1917*8hav J.
Fona&av.
OamMe
The argument that has been adduced of the possible hardshipsupon a person entitled under a will if this construction be adopteddoes not appear to me to have much weight, seeing that the otherconstruction would be at least as likely to effect hardships onbona fide purchasers, who are the persons for whose protection theprovisions of the Ordinance are concerned.
I would answer the question for our determination in theaffirmative.
Db Sampayo J.—
I had considerable doubt whether a probate or grant of administra-tion is an “ instrument ” within the meaning of section 17 of theRegistration Ordinance, No. 14 of 1891, and, more particularly,whether it was intended that a deed by an heir dealing with theproperty of the estate should get priority over the title of theexecutor or administrator, or a party claiming under him, by reasonof registration of the deed prior to the probate or letters. Itappeared to me that such a construction would lead to disastrousresults. If the deed were prior in date to the probate or letters,prior registration would, of course, have no effect. But if it weresubsequent in date, an heir would thereby be enabled to defeatthe intentions of the deceased and the claims of creditors of theestate. This very case is an illustration of the kind of resultswhich I have indicated. Probate was obtained in 1903, and theland in question was sold in 1905 in execution against the executrixfor a debt of the testator, and was purchased by the plaintiff'spredecessor in title. But in 1904 the land was sold by the Fiscal fora private debt of the executrix, who was also widow and sole devisee,and was purchased by the defendant's predecessor in $itle, who regis-tered the Fiscal's transfer in the same year. The probate was neverregistered, and on the above construction of the Ordinance the titleof the executrix as such must yield to her own title as widow anddevisee. The person whose duty it was to register the probate wasprimarily the executrix. Her failure to do so was probably uninten-tional, but she might well have purposely abstained from registeringthe probate and thus have placed the property of the estate at thedisposal of her own creditors. The result would be the same if thetransaction were her own act and not an execution sale. It mightbe said, of course, that it was within the power of the creditors of theestate or other interested parties to have got the probate registered,but that does not remove the practical difficulty. There may beeven cases in which no amount of caution would save the situation.For instance, a land may be devised, subject to a fidei commissum,in favour of unborn children of the devisee, and yet the devisee,by failing to register the probate, would be able to defeat thefidei commissum by selling away the land on a registered deed. Itmay be that purchasers from an heir must also be protected.
( 106 )
But since they know that their vendor’s title is derived from adeceased person, the circumstance necessarily puts them on inquiry,and if they buy a risky title, they can have no substantial grievance.Of course, if the Legislature has in plain terms provided that a probateor grant of letters should be deemed void as against all partiesclaiming an adverse interest on a subsequent and^ duly registereddeed by an heir, there is an end to controversy, and the lawso laid down must be accepted and enforced, however harmful theresults might be. It is because the provision of section 17 of theOrdinance in this respect is not very plain that a doubt arose as tothe propriety of construing it in that sense. But after consideringall the relevant sections of the Ordinance, I think that the expression“ other instruments ” in that section includes probates and grantsof letters of administration, and that the requirements of section 16as to the registration of such instruments in the same way as deedsand judgments necessitates the application to them of the invali-dating process provided by section 17. Fonseha v. Fernando,1 whichdecided this point, must therefore be followed. I was at firstinclined to think that section 26 of the Ordinance altered the aspectof things. It is in these terms: “ On the death of any registeredowner or other interested party, all lands belonging to him, or inwhich he may have an interest, shall remain in his name untilprobate or administration of his estate shall have been granted,whereupon, and upon a written application in that behalf, the nameof the executor or administrator shall be registered in the booksuntil a partition, transfer, or alienation of the lands shall havebeen effected, whereupon, and upon like application, such partition,transfer, or alienation shall be registered as hereinbefore provided.This section contemplates a continuous registration of the titlein the hands successively of (1) the deceased owner, (2) his executoror administrator, and (3) the heir, devisee, or other party to whomthe property ultimately passes, and the provisions, especially thewords “ shall remain in his name, ’’ seemed at first sight to indicatethat no person except one claiming from or under the executor oradministrator could derive any benefit from registration. But theOrdinance is concerned with registration of deeds or other instru-ments, and not with registration of titles, and section 26 appearsrather out of place and irrelevant. I think Mr. Jayawardene’sexplanation of the apparent anomaly is right. Section 26 is a repro-duction of section 44 of the Ordinance No. 8 of 1863, which providedboth for registration of titles to land and for registration of deedsaffecting lands, and section 44 had obvious reference to the part ofthe Ordinance which dealt with the registration of titles. Thatpart was replaced by the Land Registration Ordinance, No. 5 of1877, which relates solely to the registration of titles. The Ordi-nance No. 14 of 1891, now under consideration, has repealed the
1917.
De SampayoJ.
Fotuekav.
Oomelis
1 (1912) 15 N. L. R. .491.
( 106 )
1917.
De SahpayoJ.
Foneeka v,Cornells
whole of the Ordinance No. 8 of 1863, and by section 16 thereof hasprovided that deeds and other instruments affecting land shall beregistered in the books mentioned in section 15, “ unless or until thedivision has come within the operation of the Land RegistrationOrdinance, 1877, and if the division has come or hereafter comeswithin the operation of the said Ordinance, in the books mentionedin section 26 of the said Ordinance. ” There thus appears to be anintention to dovetail the registration of deeds with the registrationof titles, and section 26 in question is apparently connected withthat intention. The Ordinance of 1877, however, was neverbrought into operation except in the Wellawatta division, andsection 26, therefore, does not affect the application of section 15and 17 to the present case.
I therefore agree, though not without reluctance,^ that a dulyregistered deed affecting land belonging to a deceased person’s. estate gets priority over any claim based on an unregistered orsubsequently registered probate or grant of administration. I,however, think that this matter requires the attention of the Legis-lature, and in the meantime I would impress on all District Courtsand practitioners the importance of seeing that probates and lettersare duly registered.
The case was listed for further argument before Wood Renton C.J.and De Sampayo J. on December 5, 1917.
December 10, 1917. Wood Renton C.J.—
Now that the question as to whether the non-registration of aprobate is affected by section 17 of the Land Registration Ordinance,1891,1 has been decided, it only remains for us to dispose of the issuesstill outstanding in the case.
Certain points do not present any difficulty. Francina Fonsekaclearly was sued in D. C. Colombo, No. 18,816, in her personalcapacity. This is proved by the pleadings in that action, and by thefact that,- in the inventory filed by her in the testamentary case(D. C. Kalutara, No. 283), no mention is made of any debt due bythe estate to Letchiman Chetty. There is nothing to show that thejudgment debt in D. C. Colombo, No. 18,816, was incurred byFrancina for testamentary expenses. On the contrary, the finalaccount in D. C. Kalutara, No. 283, shows that only a sum of Rs. 150was borrowed from any one for that purpose; and the association,of her brother Marthenis with Francina as a joint debtor on thepromissory note indicates that the liability was a personal one.Moreover, I do not agree with the argument of the defendant’scounsel, raised for the first time on the hearing of this appeal, thatLetchiman Chetty was, as successor in interest to Francina, in a
1No. 14 of 1891.
( 107 )
position to convey good title to the defendant, whether the moneysecured by the promissory note was borrowed by her for testa-mentary expenses or not. The decision of the Full Court inHarmanis v. Harmanis1 clearly shows that an heir or devisee iscapable of giving only a qualified title to property, which is liableto be claimed by an executor for purposes of administration.
The next point is, whether it is open to the defendant, in spite ofthe Full Court decision, to argue that, although the probate isinvalid as regards the half share that would have devolved onFrancina, and although the Fiscal’s transfer in L.etohiman Chetty’sfavour does not describe her as executrix, the circumstance thatFrancina was in fact executrix at the time, the sale against hermust be taken to have been against her in that capacity, and as theFiscal’s transfer, in pursuance of that sale, is prior in date to thatof the plaintiff, the defendant is entitled to claim the remaininghalf share of the land also. Assuming that this argument is notobnoxious to the rule of " approbate and reprobate,” I do not thinkthat the authorities establish the proposition involved in it. Theymerely show that a vendor or a lessor of land who is, and is knownby a prospective purchaser or lessor to be, an executor, may bepresumed by such purchaser or lessor to have been acting, as regardsthe sale or the lease, in his representative capacity, and that the merecircumstance that the deed of sale or of lease does not purport tohave been executed by him as executor is not sufficient to raisea presumption that he was acting otherwise.® This principle is,however, quite inapplicable to the present case, in which no evidencehas been adduced on the part of the defendant to prove thatLetchiman Chetty knew that Francina, at the time of her jointpromissory note transaction with him, or at the date of the judicialsale against her, was in fact an executrix.
Through no fault of counsel on either side, the various pointsinvolved in this case have been developed in- piecemeal fashion, andthe one raised last, namely, that as Letchiman Chetty’s purchasewas effected while the appeal in the action brought by PedroFonseka against Francina and Marthenis Fernando was still pending,his purchase was subject to the result of that appeal, is the mostimportant of all. – For the reasons given by my Brother de Sampayo,whose judgment I have had the advantage of reading, I think thatthis point is a sound one, and that, although it was not raised in theDistrict Court, there is nothing to prevent us from giving effectto it here.
On these grounds I would dismiss the appeal," with costs.
{1907) 10 N. L. B. 332.
See In re Venn and Furze's Contract {1894) 2 Ch. D. 101; Whale v. Booth,
{1792) 4 T. B. 626, note (a) ; Farr v. Newman, (1792)’ 4 T. B. 625 ; McLeodv. Drummond, (1810-11) 17 Ves. 152 ; Corset v. Cartwright, {1875) L. B. 7.
Eng. and Ir. App. 721, and cp. Oangabai v. Senabai, {1915) I. L. B 40 Ben69 : Oraham v. Drummond, (1896) 84, L. T. 417.
1M7.
Woon
Renton C. J.
Fonseka v.Cornelia
( 108 )
lBl'T.
FoAmJ'4 v.' Comt is
Db Sampayo J.—
The effect of the decision on.the point referred to the Full Bench,so far as this case is concerned, is that where property of the estateis disposed of by a devisee, who is also an heir of the deceased, or issold against him in execution, upon an instrument which is regis-• tered prior to the probate of the will, the transferee obtains, inresp'ect of any share or interest to which the devisee would have beenentitled by law but for the will, a superior title to that of'the executoror a party claiming under him. The testator’s widow Francinawould be an heir of her husband to the extent of a half share in caseof intestacy, . and therefore the defendant, whose predecessor intitle purchased the land in suit in execution against her personally,may, if there was no other circumstance invalidating the sale, beentitled to that half share by reason of prior registration as. againstthe plaintiff, whose claim is founded on a sale in execution againstFrancina in her capacity as executrix. But it is now urged that the•defendant is also entitled to the other half share, the argumentbeing that, although the probate is invalid as regards the half sharewhich would have come to Francina as heir, the probate is goodfor other purposes, and that, notwithstanding the circumstancethat the Fiscal’s transfer, upon which the defendant relies, does notexpressly describe the execution-debtor Francina as executrix, shehaving been in fact executrix at the time, the sale must be takento have been against her as executrix, and consequently, as thatFiscal’s transfer is prior in date to that of the Fiscal’s transfer underwhich the plaintiff claims, the defendant has better title to theremaining half share of the land. I doubt whether the defendant,whose title is based on a sale of the entire property under one andthe same set of circumstances, can maintain that the probate isinvalid in respect of a share of the property and is good in respectof another share. But let that pass. In my opinion the authoritiescited in support of the argument above noted do not apply. Thecase In re Venn and Furze's Contract1 is relied on as showing that,’even where the executor’s deed does not purport on the face of it tobe executed by him in that capacity, the deed is as good as if ithad purported to be so executed. That may be so, but the pointdecided in that case is that where a person who is in fact an executordeals with the property of the testator’s estate, the purchaser maypresume that he is acting in the discharge of his duties as executor,unless there is something in the transaction which shows the con-trary, and that the contrary will not be shown merely because thedeed does not purport to be executed by him in that capacity. Nordo the other cases cited advance the argument on behalf of thedefendant. In Gorser v. Cartwright2 it is held that an executor, whois also a devisee of an estate charged with payment of debts, may be
. 1 (1894) 2 Ch. D. 101..* (187'5) L. JR. 7 Eng. cfr It. App. 721.
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presumed by a bona fide purchaser or mortgagee of that estate to bedealing with it for the purpose of administration, and that, even. though the money may be misapplied, the purchaser’s or mort-gagee's title is not postponed to the claims of the testator’s creditors.Similarly, Graham v. Drummond 1 lays down that where an executor,who is also residuary legatee, has parted with an asset of the estatefor valuable consideration to a person who has no notice of theexistence of unsatisfied debts of the testator, or of any improperdealing with the asset, that person’s title is valid against anyunsatisfied creditor of the testator. These cases proceed on thebasis that the third party has dealt with a person in the position ofan executor. As a matter of fact, these and other decisions of thesame kind are ah application under varying circumstances of thegeneral rule as to the powers of an executor over assets, which waslaid down by Lord Mansfield in Whale v. Booth2 as follows:'* The
general rule of both law and equity is clear, that an executor maydispose Of the assets of the testator, that over them he has absolutepower, and that they cannot be followed by the testator’s creditorIt would be monstrous if it were otherwise, for then no one woulddeal with an executor.” An exception is, of course, allowed wherethe purchaser or mortgagee acts with knowledge and is otherwiseparty to a fraud, but where the sale was three years after thetestator's death, and no demand had during that time been made bythe plaintiff (creditor), and where if the debts were paid the assetwould belong to the executors, it was held in that case that fraudwas negatived, as it was not stated that the defendant, who hadpurchased in execution against the executors personally, knew thatthe debts of the estate were unpaid. It was argued that in thepresent case it had not been shown that the defendant’s predecessorin title knew of the existence of any unpaid debts, and that he wastherefore safe. The point in the case cited, however, is that in thecircumstances of that case the purchaser might well presume thatall claims against the estate had been satisfied, but the facts of thiscase do not justify any such, presumption. Moreover, Whale v.Booth 2 is a decision on the Common law, and William on Executors rvol. 1., pp. 704-705, commenting on that case, and referring to anumber of authorities, says:“ In equity it seems to be established
that, generally speaking, the executor or administrator can makeno valid sale or pledge of the assets as a security for or in respect ofhis own debt, on the principle that the transaction itself gives thepurchaser or mortgagee notice of that misapplication, and neces-'sarily involves his participation in the breach . of duty.” Thisprinciple is applicable to the present case. Whale v. Booth 2 has alsobeen referred to as an authority for the proposition that a salein execution cannot be distinguished from an alienation by theexecutor himself, and that, therefore, in the case of a sale under
1 (1896) 74 L. J. 417.217 Vet. J. 165.
1917.
De SamfaxoJ.
Fonseka e.OorneUa
12-
( no )1917.
Dfi SampayoJ
Fonseka v.Cornelia
writ against the executor for his private debt, the property passesby the execution and cannot be followed by a creditor of the testator.But in the later case, Farr v. Newman,1 in which Whale v. Booth *was cited, it was laid down broadly that the property of a testatorin the hands of his executor could not be seized in execution of ajudgment against the executor in his own right, and there are otherauthorities to the same effect. In my opinion the argument onbehalf of the defendant in respect of the half share of the land' which is unaffected by the question of registration of the probatecannot be sustained.
So far I have dealt with the defendant’s claim to a half share ofthe land on the strength of the decision of the Full Bench as to theeffect of prior registration, and with his claim to the other half shareon the further argument now maintained. But Mr. Bawa raises aserious point, which, if decided 'in favour of plaintiff, will go to theroot of the defendant’s entire claim. The facts relevant to thispoint may be briefly stated. The testator, Solomon Fonseka, diedon February 7, 1902, and his widow, Francina, as executrix, took outprobate later in the same year. Francina, by deed dated October 21,1902, purported to sell the land to her brother Marthenis Fernando.One Pedro Fonseka, who had obtained judgment against theexecutrix for a debt of- the testator, seized the land in execution onFebruary 18, 1903, when Marthenis Fernando claimed the land.This claim being upheld, Pedro Fonseka brought a Paulian actionagainst Francina and Marthenis Fernando to have it declared thatthe transfer by the former to the latter was a fraudulent transaction,and that the land was still property available to creditors of theestate. The District Judge gave judgment in favour of the plaintiffon July 13, 1903, and the same was affirmed in appeal on June 16.1904. The land was ultimately sold at the instance of the plaintiffand bought by himself, and the Fiscal’s transfer was issued to himon October 25, 1905. While the case was pending in appeal, how-ever, a Chetty who had got judgment against Francina and Mar-thenis Fernando on a promissory note made by both of them, seizedand sold the land on April 9, 1904, on a writ to levy the amount outof vhe property of the judgment-debtors, Francina and MarthenisFernando. It is from the purchaser at this execution sale that thedefendant claims title. It has been assumed in the case that theland has been sold as the properly of .Francina. I think 'ratherthat, in view of the transfer to Marthenis Fernando, the land shouldbe more properly be taken to have been sold as the property of.Marthenis Fernando. But, even on the above assumption, thequestion raised is whether the purchaser is not bound by the decisionof the Paulian action. I think he is. The sale was pending thataction, and must be held to be subject to the result of it, which wasthat the land was still the property of the estate, and was liable to be14L.J. 621.* 17 Yes. J. 165.
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sold in execution of the judgment against Francina as executrix.Consequently the sale under the writ of the creditor of the testator,though subsequent in date, in my judgment prevails over the saleto which the defendant traces title. For this reason I think thedefendant’s appeal absolutely fails.
I would dismiss the appeal, with coats.
1917.
Ds SAWiSOJ.
Ponttka e.OomeU*
Appeal dismissed.